Walmart Stock Analysis

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Walmart Stock Analysis

Walmart (Wmt) Stock - Will It Decline On Tariffs?

The Q1 earnings results of Walmart were above the market expectations. However, that result is not in the limelight because the big picture is the Trump Tariffs.

Walmart is the largest supermarket chain in the USA and many other countries. Any tariffs on the imported items means Walmart will have to hike the prices. And higher prices will ultimately effect the sales & lead to lower revenue for Walmart.

Walmart Earnings At Risk

Normally, Walmart is one of those stocks which shows resilience even during economic uncertainty. But, this time is different and even Walmart can't shield itself from the tariff turmoil.

The recent agreement between China and the USA was celebrated by many investors. However, that will be short-lived unless both countries agree on a long-term trade deal.

Unless the tariffs on the imports from China is lowered or cancelled, the Walmart's bottom line will be effected! Even after the recent deal, the Chinese products still carry 30% tariffs.

According to Walmart's CFO, John David Rainey, the tariffs are still 'too high.' He went on to say that some things 'are likely going to go up, and that's not good for consumers.'

Walmart may suffer if American consumers suffer. The worst-case scenario is if the Trump administration reinstates the high tariffs from before. Rainey stated, tariffs returning back to high levels will impact the financial situation of the Walmart. In fact, it will make it tough for Walmart to grow its annual earnings.

So in the short term, the Walmart stock will suffer, and there's no way around that. Recently, Trump also stressed the need for Walmart to absorb the price shock and pay it from its profits.

That's why, it is safe to say that the results from the next few quarters wouldn't be so great for the Walmart and other retail giants in the USA.

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